BA threatens to favour Madrid over Heathrow for expansion

11.6.2010   (FT)

By Pilita Clark and Richard Milne in London

British Airways will expand at Madrid rather than Heathrow after its planned
Iberia merger if the UK fails to address increased demand now that it has scrapped
plans for a third runway at the UK’s biggest airport, Willie Walsh warned yesterday.

“You’ve got a fantastic airport in Madrid that has excess capacity that the Spanish
government has invested in, that Madrid’s local government has invested in, and
we’ll grow there,” the BA chief executive told the Financial Times in a video

“Growth is not going to go away. Growth will just leave the UK and go to other
parts of Europe. BA will be able to access that growth because our assets are
mobile and we can focus on developing Madrid rather than . . . London.”

The UK government confirmed last month that it would not allow new runways at
Heathrow, Gatwick and Stansted, causing frustration in the aviation industry.

Ministers say increased demand for air travel in the south-east of the UK – predicted
to grow from 117m passengers in 2000 to 300m in 2030   (256% growth) – can be catered
for by regional airports and high-speed rail links.   [The CCC said the UK could have 60% more air passengers by 2050 than in 2005].

But some in the industry are unsure how such plans will work, especially since
Heathrow is the only true international hub airport in Britain.

His comments come as BA faces fresh industrial action in the bitter dispute with
cabin crew.

Asked if he was worried the dispute would see BA lose corporate travel customers,
he said: “No, I’m not. My sole worry is about long-term viability.

“These customers want to see BA succeed. We’ve had fantastic support from our
corporates . . . from our regular customers.”

The Unite union, which represents most of BA’s 13,400 cabin crew, has written
to the airline to notify it that it plans to ballot for another strike.


Comments from AirportWatch members:

This shows that the Heathrow project is not dead. This is a rather ridiculous
threat, however, as it is clear why BA is LHR’s biggest   customer (and big at
Gatwick, and London City) is because of a proximity to London.   No matter how
nice Madrid airport is, it is not near London.   Are they really suggesting that
all the extra anticipated traffic   BA was wanting  will use Madrid instead? How
does it get there from London?

Of course they could get new traffic from Spain    ie a new network of long-haul
routes from Madrid, but this would be mostly orthogonal to their existing traffic
and the source for expansion they previously anticipated. Of course Ryanair and
easyJet have both moved into southern Europe when growth in the UK stalled, and
BA could get a slice of that.   But there is no way they are going to get 50m plus
new passengers there. ,

And even if they did – so what?   It is at most losing us the transfer traffic,
and good riddance to it.   BA would still get the revenue and unless it moves its
tax base, the Treasury would benefit too.


This is a threat which one might hope is a promise.   If BA does expand, in Spain
or anywhere else, it is likely to be unsustainable because of oil prices and actions
to protect the environment.   From an economic point of view it would be better
for that expansion and contraction to take place elsewhere but best of all, not
at all.   You have to ask why if Walsh thinks Madrid is so fantastic he’s banging
on about Heathrow so much.   It’s not as if he is concerned with anything other
than financial advantage for BA – whatever the cost to the environment.


This looks like  a threat to ensure mixed mode is introduced at Heathrow.